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| - | Peter owns an effective business that is growing quickly. Like many businesses, Peters company has great commercial and government clients that get regularly from him. And because Peter is truly proficient at his business, his clients have already been acquiring more and more items from him. His business seems solid.
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| - | But some cracks are starting to appear in the foundation. Hes been near to missing paycheck twice. Hes slowing provider payments. Worse, he decided not to bid for a major government contract because he couldnt afford to. Thats correct he couldnt afford to bid for new business. He was afraid of experiencing to add more employees and buy more materials.
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| - | Just how can that be?
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| - | Similar to business owners, terms are extended by Peter to his clients. He is usually paid by them in 30 to 45 days. But, because Peter runs a small company, his manufacturers desire that he pay them in 10 days. Plus employees need to be paid every two weeks.
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| - | In summary. Peter has customers that want to pay for in 45 days and suppliers/employees that want to be paid in 10. The z/n doesnt work, because the company does not have a lot of profit the bank.
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| - | Can there be a remedy? Yes, Peter must look into factoring his invoices to repair his income. He will be provided by factoring with the mandatory cash to pay suppliers and workers, while the 30 to 45 day wait to have reducing settled.
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| - | Invoice factoring works as follows:
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| - | 1. You provide the merchandise or service and bill your client
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| - | 2. You send a copy of the invoice to the factoring company for funding
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| - | 3. The factoring company advances you around 90% of the invoice. Immediate funds are got by you.
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| - | 4. Once your client pays the bill, the transaction is completed
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| - | With factoring, Peter will have a way to generally meet his current obligations. His company will also have enough cash on hand (or liquidity) to bet on new career plans, allowing him to develop the business and take it to another stage. Peter owns an effective business that's growing quickly. Like many companies, Peters company has good commercial and government customers that buy regularly from him. And because Peter is really great at his company, his customers have now been acquiring more and more services and products from him. His business appears reliable.
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| - | However many cracks are just starting to come in the foundation. Hes been close to missing payroll twice. Hes slowing provider funds. Worse, he chose to not bid for a significant government deal since he couldnt afford to. Thats correct he couldnt afford to bid for new business. He was afraid of having to get more supplies and add more workers.
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| - | How do that be?
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| - | Like most business owners, Peter runs terms to his customers. They often pay him in 30 to 45 days. But, because Peter runs a small company, his companies demand that he pay them in 10 days. Plus personnel need to be paid every two weeks.
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| - | To sum up. Chris has clients that want to pay for in 45 days and suppliers/employees that want to be paid in 10. The r doesnt work, because the organization doesn't have a lot of profit the financial institution.
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| - | Will there be an answer? Yes, Peter must look into factoring his bills to correct his cash flow. Factoring can provide him with the mandatory income to pay suppliers and workers, while eliminating the 30 to 45 day wait to obtain paid.
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| - | Bill factoring works as follows:
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| - | 1. You provide the product or service and invoice your client
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| - | 2. You send a copy of the account to the factoring company for funding
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| - | 3. The factoring company advances you up to 90% of the account. You get immediate funds.
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| - | 4. The deal is completed, once your client pays the bill
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| - | With factoring, Peter will have a way to meet up his current responsibilities. His company may also have enough money on hand (or liquidity) to bid on new job proposals, allowing him to grow the company and take it to the next stage.
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